Organic soybean prices remail elevated along with organic soybean meal prices, as shipments from India remain below average. News from India, the largest shipper of organic soybean meal to the United States, describes a situation where shipments are behind and will likely take approximately 60-days to catch up according to Merchandisers.
COVID infections are accelerating, now that the country has loosened restrictions and allowed states and local governments to make their own decisions about movements. India is the fourth worst-hit country in the world according to Johns Hopkins University data. The number of cases has spiked in recent days and the cumulative numbers are now over 332,000. While this is not a certainty, there could be another lockdown if the cases in India continue to spiral out of control. With nearly 70% of the organic soybeans/meal import coming from India, prices could remain elevated and climb higher.
US Retail Sales Surge
US retail sales surged higher in May rising nearly 18%, with most of the gains in the auto sector. There were also very strong gains in the grocery store sector, which should help continue to buoy organic animal protein retail sales (eggs, chicken, turkey, dairy). Grocery store sales rose a robust 14.3% year over year in May. With restaurants still having a difficult time opening, this sector should continue to remain buoyed.
*Source St. Louis Fed
Restaurants face a cash crunch. Not only are restaurants in need of cash for their reopenings they need to deal with overdue bills. Food suppliers are also in a bind as most of their supply chain was crushed by the stay at home orders. Restaurants, with their high failure rate even in good times, have trouble getting financing from banks, and the situation is worse now. This could further put upward pressure on grocery store retail sales further buoying organic grain prices.